NOW: Pensions Future Forum2018

NOW: Pensions Future Forum2018

Joanne Segars | Trustee DirectorWelcome

• Welcome and housekeeping – Joanne Segars, Trustee Director

• Introduction – Nigel Waterson, Chair of Trustees

• Company update and overview – Troy Clutterbuck, Interim CEO

• Investment review - Rob Booth, Director of Investment & Product

Development

• Operations and Gateway update - Neil Buckley, COO

• Q&A facilitated by Joanne Segars

• Coffee

• The future of Britain in a post-Brexit world, Iain Anderson, Executive

Chairman, Cicero

• The future of Work, Timandra Harkness, BBC FutureProofing

• Panel discussion and Q&A

• Lunch

Agenda

Introduction

Nigel Waterson | Chair of Trustees

Introduction

• Introduction to the Forum

• Master trust regulation

• 2017 auto enrolment review

Company update and overview

Troy Clutterbuck | Interim Chief Executive

1.6m32,000Employers Members

Key facts

£600mAssets under management

Third largest auto enrolment provider

Who’s in the scheme?

• 43% female

• 57% male

• Average scheme member age 39

• Average fund size £400 (£340 for women / £430 for men)

• In ten years from now, following AE minimums, fund sizes will be equal to one year

of earnings

• 8% opt out rate against industry average of 9%

Opt out trends

Age Men Women All

22-29 3% 5% 4%

30-39 5% 7% 6%

40-49 7% 9% 8%

50-59 12% 15% 13%

60-64 30% 38% 33%

All 7% 9% 8%

Structure

ATP

NOW: Pensions

JLT

TCS

Providing the right long term solutions to help you give your employees the best possible pension

Improving all aspects of the service we provide to you and your employees

Improving processes, people and platforms

My focus

Auto enrolment is changing

Contributions are increasing

8% isn’t 8%

Communications toolkit

Workplace posters

Why have a pension? Video content

Workplace leaflets Template e-communications

Pay slip messaging

The big challenge of small pots

Pensions dashboard project

3 in 5 British workers have already had at

least four jobs in their lifetime

A third of people don’t know where all

their pension pots are

400mUnclaimed

pension savings

Investment review

Rob Booth | Director of Investment and Product Development

“Simplicity is the Ultimate Sophistication”

- Leonardo Da Vinci

Why one investment solution?

• Trustee Board takes full responsibility for investment policy

• 99.7% of master trust members do not make active decisions (PPI)

•Members who do self-select, often fall into the ‘buy high / sell low’ trap…

Well, that was an interesting year…

Well, that was an interesting year…

But the S&P 500 kept marching on…

NOW: DGF Member Returns

Note: Member Returns are net of the 0.3% annual management charge

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

Diversified Growth Fund Cash + 3%

1 Year Return to 31/12/17

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

Diversified Growth Fund Cash + 3%

Since Launch (01/01/13) to 31/12/17

11.0%

49.8%

3.3%

18.4%

But we’re still not complacent

Markets seem on edge

The Diversified Growth Fund

Risk allocation

Bonds

Inflation

Equities

Others

•A diversified multi-asset portfolio which aims to provide higher risk adjusted returns over the long term

•Target return of 3% over and above the return on cash over a rolling five year period

•A focus on stable and asymmetric returns

•A fund which is expected to do well in different economic environments

“This is a sophisticated approach to multi-asset investing.”

“The team think deeply about portfolio construction and risk factor correlations.

Particular attention is paid to volatility and stress scenarios where they use expected shortfall to measure risk.

The strategy extensively utilises the ATP risk infrastructure”

Trustees appoint Redington as Investment Advisers

Clear, fair and simple member charges

Investment0.3% pa

Administration£1.50 pm

4,330 members retired in 2017

83.4%

15.3%

0.9% 0.3% 0.1%0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

<£1,000 £1,000 - £5,000 £5,000 - £10,000 £10,000 - £30,000 >£30,000

Percentage of retiring members by fund size

Glidepath to retirement

Managed Diversified Growth FundReturn Target: Cash +3%

Retirement Countdown FundReturn Target: Cash

Operations and Gateway update

Neil Buckley| COO

Where we were

• Systems issues

• Manual processes

• Resolution times too long

• Issues with responsiveness

What’s changed?

• People – Nottingham operational centre supported by TCS

• Platforms – launch of Gateway

• Processes – defined and evolving

Then and now

Benefits of Gateway

Gateway Data

£600mTotal members1.6m

Funds under management

99.5% 99.5%Members transitionedEmployers transitioned

Just 55 employers still to

move across to Gateway

Client views on Gateway

“It’s really easy to upload my payroll files. Gateway is

intuitive.”

"Your old portal told me there was a problem, but gave me no clue as to what the problem was or how to fix it. The new

portal does that very well”

“I used to have to wait for ages for my files to upload and now it’s done quick as

anything”

"Thanks for your help - liking the new

Gateway”

“I just wanted to tell you that your new portal is great. It’s so quick and easy, so much better than the old one“

Customer experience

Now:

• Employer and bureaux relationships managed by NOW: Pensions.• Member experience outsourced to JLT.

The future:

• A holistic client and member experience all managed by NOW: Pensions.• More self-service options including a member app in Q3.

What’s next?

• Simpler more intuitive self service

• Straight Through Processing

o Faster from payment to investment

• Consolidate customer experience

• More direct, real-time information to members

o Fund values

o Self service

o Dynamic benefit statements

Thank youAny questions?